Thursday, 21 February 2008

[Others.016] Proposed legislation to regulate mortgage brokers

There's this article from MoneyManager called What's up with no-docs? which talks about some proposed legislation to regulate mortgage brokers.

It might be unfair to blame broker for a loan default, but it's definitely a welcomed move to see government doing something to protect consumers!

Some of the proposed consumer protection from that article:

In the future mortgage brokers will have to:

* Be licensed;

* Go through probity checks;

* Meet mandatory educational requirements;

* Belong to a dispute resolution scheme;

* Have professional indemnity insurance;

* Disclose costs upfront;

* Declare any commissions;

* Ascertain a client's financial capacity to pay;

* Brokers may have to pay up to $25,000 in compensation if an inappropriate product causes a customer to lose money.They may also be fined up to$25,000 by the regulator.Ultimately, their licence can be suspended or cancelled.

1 comment:

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